By Sérgio Eliezer Pelcerman
With the creation of Law 14.020/2020 from July 6th, 2020, many aspects that haven´t been defined regarding the retired employees, anticipated by Provisional Measure 936/2020, came into an agreement. Further legal security was granted to employers and employees in such situation of job maintenance during the pandemic.
In short, wage and working hours reductions, as well as the employment contracts suspension for retired employees are expressly authorized as long as they respect what is anticipated by the federal legislation.
It´s worth to ponder that the employer who decides either for wage and working hours reduction or the suspension of a retired employee´s employment contract must pay for it without the government´s monthly compensatory help, according to the conditions anticipated in article 12, § 2nd of the legislation aforementioned.
It´s important to highlight that the new legislation anticipates in its article 9th many advantages for the employer when it comes to the referred payment, given that the compensatory help (i) shall have a value defined either by collective negotiation or written individual agreement; (ii) will have a compensatory nature; (iii) will neither be part of the basis of calculation of withholding income tax nor part of the annual adjustment of the income tax over employee´s natural person income; (iv) will not be part of the basis of calculation of the social security contribution and other incidence of taxations in the payslips, and (v) will not be part of the basis of calculation of the Severance Indemnity Fund deposits that must be collected even for retired employees.
We stand out that the aforesaid modifications present enormous tributary advantages for the employers who will, in such conditions, significantly reduce the tax collection over the employees´ payslips. It is specifically related to funds like the National Institute of Social Security and other social insurance contributions.
Finally, with the conciliation of this theme brought by the wording of Law 14.020/2020, we recommend the employer to pay the whole period of suspension or reduction of wage and working hours considering, for this matter, all benefits derived from the new legislation.
Sérgio Eliezer Pelcerman, lawyer at Almeida Prado & Hoffmann Advogados Associados office.